Press Conference of 2012 China Urban Competitiveness Report (Hong Kong)

Organizer
The Better Hong Kong Foundation

Co-organizers
Center for City and Competitiveness, The Chinese Academy of Social Sciences
Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong

(23 May 2012, Hong Kong) The Press Conference of 2012 China Urban Competitiveness Report (Hong Kong) is held in Hong Kong on 23 May 2012. It is organized by The Better Hong Kong Foundation and co-organized by Center for City and Competitiveness, The Chinese Academy of Social Sciences and Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong. “The 2012 China Urban Competitiveness Report” project is led by Prof. Pengfei Ni in The Chinese Academy of Social Sciences. In addition to the presentation by Prof. Ni at the press conference, the Foundation is also pleased to have invited Prof. Jeff Lin, Professor of Economics and Associate Dean of Institute for Advanced Studies in Humanities and Social Sciences of the National Taiwan University; Prof. Liu Chengkun, Associate Professor of Faculty of Management & Administration of the Macau University of Science & Technology; and Prof. Shen Jianfa, Hong Kong Institute of Asia-Pacific Studies of the Chinese University of Hong Kong to share their views and comments on the report.

1) Urban Competitiveness Ranking

Hong Kong keeps the top position. The top ten cities in 2011 are Hong Kong, Taipei, Beijing, Shanghai, Shenzhen, Guangzhou, Tianjin, Hangzhou, Qingdao and Changsha. Comparing with the ranking result in 2010, the overall gap is narrowed with great changes in the ranking of some cities. Qingdao becomes one of the top ten city, replacing Dalian. Taipei rises to no. 2. Beijing overtakes Shanghai which becomes no. 4.

Comparing with the ranking result of top 50 cities in 2010, there were more cities in the central region and more prefecture-level cities which were among the top 50 cities in 2011. Among vice-provincial cities, Chengdu improves the greatest, moving up by eight positions. Among provincial capital cities, Nanchong improves the greatest, moving up by ten positions. Among prefecture-level cities, Nantong improves the greatest, moving up by seven positions.       

Prof. Pengfei Ni pointed out that the urban competitiveness of mainland cities has risen significantly in the past ten years. There is clear improvement in the northeast region. There are significant differences in urbanization in the central region with rapid rise of central cities. Large cities still lead all cities. There is strong competition among medium and small cities. Prefecture-level cities grow ahead of national average. The gap in the urban competitiveness has narrowed overall but increased in some regions. There is still a long way to change the mode of economic growth.

2) Hong Kong’s Urban Competitiveness

Hong Kong has experienced several external economic shocks since its return to China. But its rank of urban competitiveness has risen continuously in the world. It has been the top city in China, leading the rapid rise of Chinese cities in the global competition.

With outstanding key advantages, Hong Kong will not be caught-up by mainland cities in the near future. Hong Kong has strong advantages in advanced factors, infrastructure, ecological environment, institutional environment and social environment. Facilitated by the development in the mainland, Hong Kong’s position of international finance, trading and shipping centres has been consolidated. Although the gap between Hong Kong and mainland has been narrowed, it will take a long time for Shenzhen, Beijing, Shanghai and Guangzhou to catch-up with Hong Kong.       

Enhanced economic structure which needs to be further improved. The share of service sector in GDP is well above 90%. The share of four pillar industries in GDP also rose from 48.8% in 2001 to 58.0% in 2010. The producer service is dominated by financial and professional service sectors. Its development is benefited from the growth of mainland economy. The jobs created by this sector are limited.

Income level grows significantly with a large income gap. The income level has been increased in the past ten years. GPD per capita in Hong Kong increased by 41.3% in the period 2001-2010, reaching US$31,700 in 2010. In the same period, the income level rose by 60% among the top 10% people while the income level decreased by 20% among the bottom 10% people.

Guangdong-Hong Kong regional cooperation has been sped up in the past ten years and further breakthrough in cooperation mechanism is expected. The areas for cooperation have extended with many innovations in cooperation modes. The positioning of cooperation has changed from attracting foreign investment to building most active and competitive metropolitan region in the world. The objective of cooperation has been enhanced.

The report suggested that Hong Kong should make efforts to become a most sustainable and competitive world city to respond to global challenge, lead the development of mainland cities and raise the well-being of Hong Kong residents. Specifically, the following measures can be adopted: develop knowledge economy, enhance the leading financial sector, build a city of science and education, promote R&D and innovation, construct low-carbon city and protect ecological environment, promote inclusive growth and build harmonious city, further opening and keep high freedom, develop multi-cultures and lead urban civilization.

3) Analysis on the Changing Urban Competitiveness of Hong Kong from a World City Perspective

Prof. Jianfa Shen pointed out that a research team in the Chinese University studied the changes in urban competitiveness of Hong Kong in the period 2000-2009 from a world city perspective is conducted. The result was published in “The 2012 China Urban Competitiveness Report”. The indicator system used in this study consists of a performance section and an explanation section. All indicators are normalized to a value of 0 to 100.

The performance of urban competitiveness of Hong Kong has four components – global control functions, financial sector, services sector and external linkages. The overall performance of urban competitiveness of Hong Kong has been increased since 2000. This means that the world city status of Hong Kong has been strengthening. The overall performance of Hong Kong began to decline due to the outbreak of global financial crisis in 2008. The score was dropped by 10 points in 2008 and another 5 points to reach 85 in 2009. The performance of financial sectors and service sectors managed to bounce back slightly in 2009.

In the explanatory section of urban competitiveness, five pillars, vibrant economy, educated and adequate workforce, quality environment, stable society and adequate transportation and telecommunication infrastructure, are used to explain the change in the urban competitiveness of Hong Kong.

Both indexes of vibrant economy and transportation and telecommunication infrastructure have exbited a similar rising trend since 2001. They reached their peaks in 2008 and 2009 respectively. Index of educated and adequate workforce dipped slightly in the early 1980s and kept rising to 2009. The index of quality environment fluctuated considerably in the period 1990-2006. It then rose to its peak in 2008. The index of stable society rose and fell like a roller-roaster. Within just six years from 1999 to 2005, this index reached its best performance in 2002 and its poorest performance in 2005.

The index of vibrant economy consists of five sub-indexes, market efficiency, international investment, firms’ performance, innovation-conducive environment and supply of offices. The indicator of reseach and development by higher education and government rose gradually in 2004 and then grew greatly after 2006. Although the government of Hong Kong has recognized innovation and technology as one new area for development, it still has to put more resources to stimulate the growth of local industries.

The percentage of employed persons holding a degree and age participation rate for first degree programmes and postgraduate programmes in local universities, constitute the sub-index of quality of workforce. Talent is a core factor of the urban competitiveness of Hong Kong. Although the proportion of labour force with post-secondary education rose from 24% in 2000 to 31% in 2010, it still lagged behind some global cities such as London. In London, the figure with degree education already reached 31% in 2005. Major mainland cities also catch up rapidly. In 2010, 31.5% and 22.0% of the population in Beijing and Shanghai had education of junior college and above respectively.

The index of stable society comprises five sub-indexes, health, housing, employment condition, purchasing power, and security and corruption. The sub-index of employment condition rebounded reached a new high in 2008. Whereas the trough of the sub-index of security and corruption was in 2003, its peak was in 2008. The sub-index of health has climbed up since 1980. The sub-index of purchasing power failed to sustain the rebound in 2001 and 2006. It was at its lowest level in 2008. The sub-index of housing had a decreasing trend. This sub-index scored 100 in 1985. It dropped to a score of 30 in 2008. Unaffordable housing and declining purchasing power are two potential sources of social instability in Hong Kong.

All explanatory indexes have basically performed well in recent years. Nevertheless, attention should be drawn to the sub-indexes of housing and purchasing power. These sub-indexes suffered a decline in recent years, and their future performance is likely to affect the growth of urban competitiveness of Hong Kong in the future. It is clear that the financial services and advanced producer services provided by Hong Kong are still the most advanced among all cities in China. Hong Kong is likely to maintain an indispensable role in the modernization of China.

Concluding the press conference, Ms. Karen Tang, Executive Director of the Better Hong Kong Foundation commented that “The competitive edges, such as strong global control functions and services sectors, will enable Hong Kong to occupy the higher end of the value chain, fortifying her role as gateway connecting China and Asia with the world. It should be recognized that all these competitive edges will, in turn, fortify the status of world city.”

For enquiries, please contact Ms Jimmie Chow, Communications Manager of the Foundation at Tel: (852) 2865 3529 / 6030 6025 or email: jimmie_chow@betterhongkong.org.

– End –